Can The IRS Seize Life Insurance Benefits?

Readers Question: Eric lives in Bryan, Texas and his question is: Can the IRS seize life insurance benefits?

Answer to Readers Question: Yes, the IRS can size any life insurance benefits if you owe back taxes and are going to receive a life insurance benefit settlement.

The insurance company cannot be forced to make a check payable to the IRS or any creditors. But if you are the person who receives the proceeds and you owe money to the IRS, it won’t be long before they will put a lien on your bank account. It would be wise to ask your parents to leave the insurance benefirts to a trust and you an your family as trustees, then the IRS cannot get the money since it will not be yours, but you may receive income from the trust..see an estate planning attorney to set this up for you.

Category: Bryan, Texas